KX01 (KX2-391) is a potent small molecule Src kinase/Pretubulin dual mechanism inhibitor discovered by Kinex Pharmaceuticals using its proprietary technology platforms Mimetica and Opal. KX01 differentiates itself as an inhibitor that targets the kinase substrate pocket and, therefore, offers an excellent efficacy as well as safety profile. KX01 has been shown to be very effective against a broad range of cancers in both in vitro experiments and in animal cancer models. Importantly, the compound has synergistic or additive activities with most first line chemotherapeutic agents. A completed phase study, in patients with end-stage cancer, showed a desirable safety profile and clinical response in approximately 25 percent of the patients. Phase II studies are ongoing. The composition of matter of KX01 is covered by issued patents.

In further experiments, KX01 was found to show great potency in inhibiting the growth of keratinocytes as well as suppression of neo-angiogenesis. In addition, the compound was shown to down-regulate the production of interleukin 2. These data support KX01's potential utility in the treatment of skin conditions like psoriasis. Preliminary research conducted by PharmaEssentia showed that KX01 can be easily formulated for dermatology indications.

Under the terms of the agreement, PharmaEssentia will acquire the rights for the development and commercialization of the dermatologic preparations for all indications in greater China and some other Southeast Asian countries. Korea, Japan, Australia and New Zealand are not included in this agreement.

PharmaEssentia plans to file for an investigational new drug (IND) application to initiate clinical studies in the near future. Kinex Pharmaceuticals will assist PharmaEssentia in the filing and will collaborate with PharmaEssentia in phase II and III global registration studies. PharmaEssentia will provide Kinex Pharmaceuticals with an up-front payment. There will also be milestones and royalties associated with product sales. A joint development team will be established to foster the collaboration.